Fees for calculating ERC & amending 941's

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#1
Eduardo  
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Client has two franchise restaurants (two separate S corps), and we calculated the ERC and prepared the amended 941's for five quarters that they qualified for (they qualify as their indoor sales decreased by more than the requisite percentage). No PPP as neither restaurant claimed it, and no officer payroll (client has a third business which is his main business and he takes compensation from there). Total ERC for both, before interest, is around $650K (over $700K with interest). Last week, they received the letters approving the credits and the refund checks. Based on our time in it, the total fee for both is around $2,000, which is way too low, IMO. Note that this is a really nice client who has never complained about an invoice, and we are always very timely in attending to their needs, which I know they appreciate (his wife owns her own business, and has commented more than once about how she appreciates how responsive we are).

Wondering what others charge - saw on another board where someone stated that their firm charges a maximum of $1,000/quarter, which in this case will be a total of $10,000 (amended five quarters for each). Was thinking of trying that. This client uses Paycor for the restaurant payroll, and was offered to use their preferred partners for the ERC, which led him to contacting me as he felt the firm that Paycor recommended was shady.
 

#2
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To put it in perspective, if they had gone to ADP or PayChex, or one of the ERC mills, they'd be paying between $160K to $195K (20-30%) and also be getting hit with the tax on the lowered wages. Anything reasonable and the client shouldn't even blink an eye. I listened to a podcast and the gentleman who was speaking I believe said their fees were closer to 5-8% or something like that (can't recall exactly).
 

#3
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I've been charging between 4-8%, depending on the complexity and magnitude of the credit for the several dozen I've done.
I provide the estimated fee to the client before doing anything billable, which ensures that I'm not charging a contingent fee.
Only one prospect had any issue with the size of the fee and they ended up having to have it redone, which I declined to do for them.
~Captcook
 

#4
Eduardo  
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Thanks, guys. These two were a bit simpler due to not having to mess with PPP interaction as they didn't claim PPP, however both still have a large number of employees.
 

#5
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It depends. I've been trying for at least $500/qtr or return, if the client has historically had full realization on the bill. There have been some that are above it, as this is very value add work (especially if we bring it to the client's attention). As well as I've had some where we are just looking at gross receipts across multiple entities (dealing with the attribution/aggregation rules) as well as interacting with the PPP and various ERC/covid related grants and credits, where I've spend upward of 20 hours going through the data and putting the worksheets together (and that is before review).

So, I've done anywhere from about 1-10% of the refunds (with the former being a large credit in the range of what OP is mentioning at straight time, to a more complex claim that ended up being much smaller, but had a lot of interactions), with a number being at about 200% normal rates, and that is based upon charging what I believe to be a competitive rate, especially compared to the ERC mills. And usually that includes amending the entity and personal returns for the for profits.
 

#6
Eduardo  
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That's a good metric. This client is very profitable, and there are four businesses (three 1120-S & 1 1065), a trust, and their personal taxes. I may just go with the $500/quarter as these two were easier with no PPP nor officer salary and bump up the fee for the amended corporate returns a little bit.
 

#7
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$500/qtr is 100% cutting yourself off at the shorts, IMO.
Consider the time and energy you've spent educating yourself on this particular item. Did you bring this to the client or did they ask you to do it? I had one client I hounded for 6 months to file their ERC amendments. Their total refund was $680K. I probably took 30hrs to do the amendments and charged them over $30K.
You should be thinking of this service in those terms.
~Captcook
 

#8
Eduardo  
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He sent to me - his manager forwarded the info from Paycor, who had an offer to do it for them. He told me that he didn't trust the company Paycor was using, so asked if we could do it.

ETA - just looked at our billing worksheets for both. Total for both was around 14 hours, calculations using our spreadsheet and preparing the amended 941's.
 

#9
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Is it a common practice to use % of ERC client potentially can get to calculate the fee level charged for ERC application service as an accountant? I have the impression that accountant can not charge contingent fee at least in some states.
 

#10
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Using a % of the estimated credit as a basis for your fee is different than a contingent fee.
That said, I estimate the credit to the client, which allows me to judge the records and complexity of the work and price it accordingly. I propose a specific dollar amount to the client. Given what the shady, fly-by-night guys were charging, I was probably low with what I was charging.
What I don't do is represent to the client that their fee is X% of the credit. That leans into contingent territory and I'm not playing that game.
~Captcook
 

#11
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I think we would have charged $3K to $4K per quarter we amend for. Looks like you're charging $200 a quarter? So maybe we'd have charged $35K in total?

Note: We'll check all seven plus quarters potentially but then only maybe collect for two or three commonly because we won't amend to get client some small refund.

BTW as a generalization, we're charging full partner consulting rates on every minute of work. And we're documenting the heck out of "substantial decline in gross receipts" refunds as well as "government orders" refunds. Actually RSB ERCs too when I think about it. (Our 941 explanations will show links to the government orders that fully or partially closed business.)

FYI, one of the ERC mills asked us to do a big volume of work for a flat $1500 per client. Apparently some tax accountants agreed to do that. But no way we could realize decent hourly rates at that price.
 

#12
sjrcpa  
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Wonder how many times $1,500 the ERC mill was going to charge the client.
 

#13
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I think 10-15% of refund.

My bid btw was I'd do $2500 per quarter if they passed me volume. And I wouldn't charge for quarters we decided not to amend. But also that number might need to change if they weren't sending us decent prospects.
 


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